Small Businesses Generate Solutions to Poverty

Paul Polak
The author of the book Out of Poverty, world-renowned social entrepreneur Paul Polak talks about his approach to eradicating global poverty at a lecture jointly sponsored by Tulane University, Propeller: A Force for Social Innovation and 4.0 Schools. (Photo by Guillermo Cabrera-Rojo)

Social entrepreneur Paul Polak has spent 30 years reshaping global conceptions of poverty eradication through design and marketing of “radically affordable” products that help generate income for the world’s poorest people. He talked about the steps toward “The Business Solution to Poverty” on Monday (June 1) in a Tulane University-sponsored talk at the Propeller headquarters.

“First, you have to go to where the action is,” he began — such complex problems cannot be solved from the comfort of an office. Intensive observation of the issue is next, interacting with as many community members as possible. Finally, the issue has to be understood in the context of the specific community and its geographic attributes, people and culture.

Polak’s interest in poverty eradication stemmed from his recognition of the failures of traditional aid.

“Charity helps people in need,” he said, “but it does not bring them out of poverty.” There also need to be additional markets that empower the poor to generate income, Polak said. He has founded 11 companies that aim to create these markets by working with small enterprise to design and market low-cost, income-generating products.

Polak discussed his experiences with the design and marketing of the treadle pump, used in irrigation for small-scale farmers in southeast Asia. His staff worked with local manufacturers to design a pump that could be installed at low cost and generate income for the farmer, the manufacturer and the handymen.

Polak oversaw the widespread dissemination of this product through the company he founded, International Development Enterprises (IDE). In combination with other products and services, IDE was able to leverage $78 million of capital investment to achieve an aggregated net increase in rural poor annual income of $288 million every year, helping to sustainably raise over 20 million people out of poverty, company officials said.

The talk was part of the NewDay Distinguished Speaker Series of the Center for Engaged Learning and Teaching and social innovation engagement at Tulane.

Originally posted by the New Wave. Written by Hannah Dean, a sophomore majoring in Latin American studies and political science at Tulane University.